KDKA Investigates: Is Your School Hoarding Cash?
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PITTSBURGH (KDKA) -- A fiscal watchdog group thinks school districts may be hoarding cash that should be going into the classroom or back into taxpayers' pockets.
While residents of Springdale tended to their gardens and made home repairs this summer, the Allegheny Valley School Board quietly voted to hike their taxes, despite the objections of some members who wanted to use the millions of surplus dollars the district holds in a rainy day fund called a "fund balance."
"I would consider having to raise taxes a rainy day," board member James Gaschler said.
According to figures submitted to the state Department of Education, Allegheny Valley has a fund balance of $9.5 million -- about 44 percent of its total budget. But instead of using that money, the board elected to increase taxes by 2 percent over Gaschler's objections.
"Let's not raise taxes when we can dip into our own pockets first," he said.
Neither the superintendent nor the board president who voted in favor of the tax increase would agree to speak to KDKA-TV News on camera, but both say much of that surplus is being held in reserve to cover the renovation of the school.
While accountants and bond rating agencies say a surplus cushion is prudent fiscal practice, State Auditor General Eugene DePasquale has advised districts they shouldn't exceed more than 20 percent of the total budget.
And yet, nearly half of the state's districts carry surpluses greater than that, and across the state, budget surpluses are getting bigger all the time, increasing in size by more than 100 percent over the last decade to $4.5 billion statewide.
"They answer taxpayers and explain to them why they have millions of dollars in reserves and also need more dollars from the community," Elizabeth Stelle, of the Commonwealth Foundation, said.
The fiscal watchdog Commonwealth Foundation says kids are being shortchanged and taxpayers are being over-taxed.
"If they're, in fact, hoarding money, it's two things. It's the kids are being harmed because resources aren't going into the classrooms the way that they should, and it's also property taxpayers who are being fleeced or maybe being asked to hand over more resources than the district actually needs," Stelle said.
The foundation has a searchable database of all 500 school districts.
Fox Chapel and South Allegheny are raising taxes despite surpluses of more than 20 percent. Others have surpluses so big they might consider a tax reduction. Pittsburgh Public Schools has a fund balance of $187 million, or 24 percent of its budget, while South Fayette Township has a surplus of $23 million, or 47 percent of its budget.
"The question should be how do you deliver the highest quality education in the most efficient way so you're not burdening your residents and you're not unfairly keeping resources from the kids?" Stelle said.
